FX.co ★ Forecast for EUR/USD on February 5, 2024

EUR/USD

Last Friday, the US employment data from the US Bureau of Labor Statistics surprised the currency market. US nonfarm payroll employment exceeded expectations of 157,000, with an increase of 353,000 in January. Not only that, but December's figures were revised upward by 117,000. The odds of the US central bank holding the current federal funds rate at 5.50% at the March meeting, rose from 62% to 80%, and the likelihood of a rate cut in May rose from 58% to 60%. The yield on 5-year US government bonds rose from 3.82% to 3.98%. The S&P 500 jumped by 1.07%, but the euro lacked the decisiveness to follow suit, so it fell by 85 pips. Oil and gold also fell.

The euro still has a chance to turn higher, but it needs to rebound from the support level. The nearest support is the price channel line on the daily chart at 1.0748. Just below it is the level of 1.0730. If the price does not turn from there, the price could aim for 1.0632. There is also support at the lower boundary of the wedge, which has already been tested this morning but appears to be weak.

On the 4-hour chart, the price has settled below the balance and MACD indicator lines. The Marlin oscillator has settled in the downtrend territory. Probably a short-term continuation of the downward movement.